First Utility becomes first energy supplier to offer cashback - but you'll have to sign up to Topcashback to get the £50 sweetener

In response to thawing relations with the regulator, First Utility has introduced a £50 cash sweetener for energy switchers moving to any of its tariffs after incentive rules for providers were relaxed.

To take advantage of the perk you will have to sign up to Topcashback, but this is free and only requires an email address.

To receive the payout, you must click through the website before taking out a dual fuel energy deal with First Utility.

Cashback: First Utility will offer £21 cashback per fuel to switchers through Topcashback

In December 2013, Ofgem implemented new rules that limited suppliers from offering more than four energy tariffs in a bid to help simplify choice and make it easier for consumers.

As part of these rules it banned cash discounts, including cashback, through third parties and insisted bundled products (dual fuel tariffs with non-cash discounts) must be offered to both new and existing customers.

But earlier this month, the CMA released a report suggesting provisional revisions to the new rules as it believed the changes had inadvertantly reduced competition.

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Tom Lyon, energy expert at uSwitch.com, said: ‘We agree with the CMA that relaxing these restrictions will benefit consumers by boosting innovation, choice and competition.'

Prior to the changes to the rules, 68 per cent of billpayers said they would like the option to take out an energy tariff through a cashback website, according to First Utility.

Ed Kamm, UK managing director at the energy company, said: ‘There are still millions of UK households overpaying for their energy, with more than £300 a year in savings possible by switching. And now with £50 cash upfront along with the lower monthly bills on offer by moving, there are few reasons not to make the switch.’

How can you get your hands on the First Utility cashback

The first thing you will need to do is sign up to TopCashback. Membership is free and all it requires is an email address.

You can use the search tool to find First Utility’s cashback deals through the site.

The website will then forward you on to the provider where you sign up as normal and your transaction will then be tracked and recorded.

To get the full £52.50 you must switch to a dual fuel tariff, signing up for a single fuel tariff earns a lower £21.

Anyone signing up to the cashback provider’s premium service can earn a further 5 per cent, but membership will cost you your first £5 in earnings each year.

It may take some time to appear in your TopCashback account but then you will be able to withdraw the money to your bank account, a PayPal account or even to be paid in vouchers for retailers such as Amazon, B&Q, Currys PC World vouchers, Tesco, Argos and M&S.

How does First Utility's deal compare?

BEST BUY DIRECT DEBIT ENERGY TARIFFS

Supplier

Plan name

Average bill size

Tariff type

Cancellation fees

Avro Energy

Simple and Power

£745

Fixed

-

GnERGY

GnERGY Fixed June 2017

£751

Fixed

£24.99 per fuel

Flow

Connect 6 (April 2017)

£752

Fixed

£30 per fuel

Places for People

Together - September 2017 - fixed 32

£752

Fixed

£30 per fuel

GB Energy Supply

Fixed 12 Ruby

£755

Fixed

-

Octopus Energy

Octopus Fixed 3M

£763

Fixed (3 months)

-

First Utility

First Fixed June 2017 v2

£769

Fixed

£30 per fuel

Extra Energy

Fresh Fixed Price Oct 2017 v1

£770

Fixed

£30 per fuel

So Energy

So Dragonfly

£770

Fixed

£5 per fuel

Co-operative Energy

Co-op Fix for Longer September 2017

£770

Fixed

£30 per fuel

Source: uSwitch, correct as of April 28 2016

Currently, the cheapest dual fuel tariff on the market from relative newcomer Avro Energy is fixed for 12 months and would cost the average UK household using 3,100 kwh of electricity and 12,500 kwh of gas £745 a year.

First Utility’s dual fuel tariff fixed for one year would cost the average family £769 a year, £24 more expensive than the best buy deal.

However, if you were to take advantage of the cashback deal this would bring the effective cost down to £719 a year, £26 less than Avro Energy's Simple and Power tariff.

One drawback, however, is that the tariff does come with exit fees of £30 per fuel should you choose to switch before your contract is up.

Watch out

Remember, if you are already signed up to a fixed energy deal your provider may charge you hefty exit fees often around £30 per fuel.

This means switching away before your contract is up could end up costing you more.

Make sure to hunt around for the best deal for you, you can use This is Money's energy finder tool (right), powered by Energy Helpline to use your postcode and energy use to compare prices in your area.